Entrepreneurship Seminar 2011
A
2
Z Solutions
for preservation, dissemination and
digital information management
This business plan is submitted in a seminar on
entrepreneurship called European Virtual Venturing
for the fulfillment of the Module 4 - Human resource
management, International master in digital library
learning program.
Supervisors
Professor Aira Lepik, Tallinn University, Estonia and
Professor Rick Thompson & Professor Claudie Orian,
Ecole supérieure d'informatique réseaux et systèmes
d'information (ITIN), France.
April 2011
French Part: David Fernandes Jérémie Crochemar Jonny Ndi Estonian Part: A. I. M. Jakaria Rahman Muharrem Yilmaz Dydimus Zengenene D I L L 2 0 1 1 – I T I N M 2 I R T 2 0 1 1 3
Executive Summary
Business concept
Company Overview
Mission, Vision, Specialty
Company structure
Why this service?
Service description
Market: description
Market: overview
Market: environmental analysis
Marketing mix (the 7p’s)
SWOT analysis
Porter five forces analysis
Strategic plan
Financial plan
A. Concept Description
The main aim of the business is to provide a service that non governmental
organizations will take full advantage of information management and dissemination technologies at affordable costs.
B. Opportunity
Due to the proliferation of democracy and humanitarian work, many non governmental organizations are emerging covering wide ranges of information generating activities. These organizations rely on donor funds. They, therefore, seek to achieve maximum efficiency and effectiveness at the lowest cost possible.
Application of technology in information management is a recent development that has potential to grow, organizations which do not specialize in technology are less likely to adapt to these changes without special assistance from specialist companies. A 2 Z will there meet these demands of affordability and efficiency in supporting information management technologies.
A 2 Z does not have any direct competitor in its target market segment, however large companies that offer generalized IT support services like Microsoft will offer indirect competition. Our strength however is on lower costs and closeness to the customer.
C. Competitive advantage
Our set of services is packaged as one stop service which that maintains the customer loyalty from installation to perpetual support. Open source software is gaining more popularity and trust among customer as compared to proprietary software which is generally regarded as profit centric rather than service centric.
Our support for these software will ensure that we are highly specialized in reliable but cheaper services. We will have to support organizations from installation, configuration and setting up, metadata entry and continuous support as need be.
D. Challenges
Though we foresee great profits in the referred markets. We are aware of the fact that our service can easily be copied by competitors since it is best on the free open source
software. As new graduates we also note that we do not have experience.
E. Solution
To meet this challenge, the company will embark on a vigorous and aggressive marketing program that anchor on strong values as well as effective communication with the
customers. We, therefore, seek to position ourselves on the market with swift speed and expand as quickly as possible at the same time maintaining customer loyalty to safeguard
A
2Z solution is a newly formed company
To provide services that promote the
utilization of
Open Source Software
to manage and disseminate information
To support
non-profit
organizations
which do not afford to hire their own IT
experts and information management
professionals
These organization generate a lot of
information which need to be managed
and disseminated with the help of IT
8
Company Name: A
2Z Solutions
Provide services for preservation, dissemination and digital
information management using open source software
Mission • To promote technological information management for non-profit organizations Vision • To make sure that information technology is cheaply harnessed in the non-profit sector particularly in information management and dissemination Specialty
• Digital Asset and Information
A2Z Solution Headquarter Paris (France) Branch Tallinn (Estonia)
Establishment in
France : headquarter
Estonia : branch
Operations limited to France and Estonia at the beginning Going to be global if it success
• Become a leading and
prestigious company with high
quality for information
treasures by exploring them
around the world
• Contribute to world
development through IT
utilization
Lots of
information
Fact
Organize, Manage & Disseminate Organize, Manage & DisseminateSolution
Affordable cost
Effective
dissemination of
the information
Better access
11Offer expert support of the following software
Dspace Greenstone E-print
Content Management System software • Drupal • Joomla • Plone • Wordpress, etc
Offer the following services
Installation of information management softwares Customization of the softwares according the customers organization policy Digitization of documents as per need, (e.g.:
scanning documents and upload in the system) Metadata input against digitized object Training of the manpower of the respective organization Data backup services (in case
of unforeseen disasters)
Need for keeping digital assets Accessibility via networks For non-profit organizations Offer expert support on open source softwares Open Source Software : Free Open Source
Software : Free Installation and Support : Very
Expensive Installation and
Support : Very Expensive
Offer a cheaper and reliable service which is affordable to the non-profit making
organizations
• Completely confidential, reliable, trustworthy expertise, and service(s) through the provision of an uncompromising service. This dictates that we have the latest technology, hardware, software, and well-trained personnel so as to deliver this promise.
Excellence in fulfilling the promise
• We cannot afford to delay our clients for whatever reason, as this will have a negative bearing on our image, reputation, and future business. We need to be continually communicating with the client, ensuring we provide needs-based solutions.
Timely response to clients' orders
• Considering the nature of our services, the skill and depth of
knowledge of our personnel is of utmost importance in determining the provision of the service(s) to the end-users.
Skill and depth of knowledge
• Not wanting to be associated with the numerous vendors on the market, we intend to aggressively market our business and the services we provide in order to be at the top of our clients' minds
Clear product and marketing positioning
• The company's various alliances with technological and training partners shall prove invaluable. The skills and intellectual capacity these partners will have in the fields of product support, design and system integration, implementation and execution, lifecycle support and understanding, training, and in the application of new technology are intangible benefits to A2Z solution.
Leveraging from a large pool of expertise
Features
• Dspace • Greenstone • E-print
• Content Management soft
Open Source Software
• Designing • Development • Training Services available • Setting up • Customization • Utilization • Data Backup • Support Center IT & Information Management Personnel
Stage of development
16• Analysis of needs
• Installation of information management softwares
Setting Up
• Customization of the softwares according the customers organization policy
• Development / Editing of Source Codes
Customization
• Digitization of documents as per need, (e.g.: scanning documents and upload in the system)
• Metadata input against digitized object
• Training of the manpower of the respective organization
Utilization
• Continuous support • Call Center
• Data backup services
Resolution Center
Optimal Price (1 day) for Service “Setting Up”
Price Responses Percentage (%) Cumulative Quality answer Answer : Price too high Percentage (%) Cumulative Price answer % potential buyers 700 100 20,00% 100,00% 0 0,00% 0,00% 0,00% 800 225 45,00% 80,00% 0 0,00% 0,00% 20,00% 900 125 25,00% 35,00% 40 8,00% 8,00% 57,00% 1000 30 6,00% 10,00% 50 10,00% 18,00% 72,00% 1100 20 4,00% 4,00% 80 16,00% 34,00% 62,00% 1200 0 0,00% 0,00% 125 25,00% 59,00% 41,00% 1300 0 0,00% 0,00% 180 36,00% 95,00% 5,00% 1400 0 0,00% 0,00% 25 5,00% 100,00% 0,00% TOTAL 500 100,00% 500 100,00% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 700 800 900 1000 1100 1200 1300 1400 P e rc e n ta g e ( % ) Price (euros)
Cumulative Quality answer Cumulative Price answer Potentials buyers
Price Analysis
Support 1 month : 5000€ 1 year minimum 0-100 docs : Free 100 more docs : 500€ Utilization 1 day : 1,500 € Minimum : 3 days 0-100 docs : Free 101 to 1000 docs : 799 € 1001 to 3000 : 1 999 € 3001 to 8000 : 3 999 € 8001+ : 0,49€ per document Customization 1 day : 1,500 € Minimum : 4 days 0-100 docs : Free 101 to 1000 docs : 799 € 1001 to 3000 : 1 999 € 3001 to 8000 : 3 999 € 8001 + 0,49 € per document Setting Up 1 day : 1,000 € Minimum : 3 days
More days may be needed in case of large organization)
Prices
20
France
84
89
Estonia
15
54
International
National
Number of
Registered
NGOs
III. Target
–
Not segmenting the market according to their category because
our services can be applied to any kind of activities.
Estonia and France
Small / Medium Non governmental organization
NGO which produce information enough to require high-quality IT and information management
NGO too small to have either a separate IT management staff or professional information managers
Our client is not individual. They are organizations,
we should:
• Build an image & reputation through successful
cases
• Publicity through newspapers and Internet
• High visibility on the internet searching
• Visible in
community,
groups of similar
businesses
We act with integrity and show respect
• Demonstrate a
commitment to integrity and ethics
• Show respect for and value all individuals for their diverse
backgrounds,
experience, styles, approaches and ideas • Speak positively and
supportively about team members when apart
• Listen to others for understanding.
• Assume positive intent
We are all accountable
• Accept personal
accountability for our own actions and results • Actively engage in
discussions and support decisions once they are made
• Involve others in
decisions and plans that affect them
• Keep promises and commitments made to others
• Personally commit to the success and well being of team-mates
We are passionate about our business, our brand and our
Offers
• Show pride in our brand and heritage
• Promote a positive, energizing,
optimistic and fun environment
• Serve our customers through the quality of services
• Promote and implement creative and innovative ideas and solutions
• Aggressively promote and protect our
reputation
France Estonia
A2Z
Solution
Customers Suppliers Partners Banks States Competitors NoneNon-Governmental Organizations
None - Dspace - Greenstone - E-prints - Content Management eg. Joomla, Plone, Wordpress, DurpalOverview
2425
The market is still new and not saturated
Most companies are not focused on IT, but on the
services
with
IT
personnel
and
Information
Management personnel
Market is very fresh in Estonia and France, and there is
no competitor till now
The partners are a very important part of our strategy
Partners are the one who will provide the update of
softwares, and technical solutions and services through
us.
We gathered a list of potential partners, and studied their
partnership conditions.
Partnership relationships will take time, but will be
valuable
27
• Installation Customization, Digitization, Metadata input, Training, Backup services, Continuous support
1. Product (Service)
• The price lower than the cost of hiring and maintaining professional experts
2. Price
• Most services will be provided at the customer’s premise
3. Place
• Internet and website, Newspaper, magazine advertisements, Conferences, Face to face
4. Promotion
• Internal : Staff needs financial benefits and motivation
• External : Customer is king, law is my master and profit is my motive
5. People
• Customization of the software according the customers organization policy
6. Process
• Maintenance and publication of customer reports and feedback
1. Product (Service) – Installation – Customization – Digitization – Metadata input – Training – Backup services – Continuous support 2. Price
– The price lower than the cost of hiring and maintaining professional experts, – A survey will always be carried out to balance the market expectations and
the need to maintain a viable business
3. Place
– Most services will be provided at the customer’s premise except the data backup for which the company will maintain a secure server for clients’
4. Promotion
– Internet and website
– Newspaper, magazine advertisements – Conferences
– Face to face
5. People
Internal
Staff needs financial benefits and motivation
– Recruitment policy (Get the right people on the bus, the wrong people off the bus, When we have the right people on the bus ensure the right people are on the right seats of the bus)
– Maintaining the culture of information sharing among staff members
External
– Policy (Customer is king, law is my master and profit is my motive) Customer representatives
6. Process
– Installation of information management softwares
– Customization of the softwares according the customers organization
policy
– Digitization of documents as per need, (e.g.: scanning documents and
upload in the system)
– Metadata input against digitized object
– Training of the manpower of the respective organization
– Data backup services (in case of unforeseen disasters)
7. Physical evidence
– Services will be offered to the locations of the company however the
following will serve as physical evidence of Excellence
– Professional dressing of staff that interact with customers
– Maintenance and publication of customer reports and feedback
Strengths Weaknesses
Opportunities Threats
- New service on the market
- Covering a large perimeter
- Booming market
- Competitors can easily copy the existing
service
- Softwares supported can update / need to be trained
- Lack of documentation to know well the
sotfwares - High demand - Low Cost - Good IT science knowledge - Customer Loyalty / Relationship - Absence of - experience
SWOT Analysis
31• Using IT consultant company is common phenomena • People desire more
electronic information • People like virtual
communication with organizations
•The market is fresh and full of opportunities
•Organizations get fund for digitization
•Open source software cost nothing • International and national authorities encourage • E-governance • Preservation of
intellectual assets Political
factors Political factors Economic factors Economic factors Technological factors Technological factors Social factors Social factors 32
Political factors
• International unions and some national authorities are encouraging organizations to digitalized and preserved their intellectual assets
• The rules, regulations, rights, obligations and available state aid are the same for all companies whether they are French or not
• French companies create their own legal entity, without having to invest a minimum amount or create a minimum number of jobs
• Company legal structures may be implemented on a temporary or permanent basis without running any legal risks
• According to a report by OECD (Organization for Economic Co-operation and Development) in 2009, Estonia has an open and friendly business environment even though it needs to do more.
Economical factors
• Enormous funds are available by European Union for the organizations which want to create digital property
• Many IT - Software consulting companies already exist but their target market is not very precise as our company.
• The open source software consulting is very fresh on the market, and full of opportunities
Social factors
• In Europe, people are getting more desired electronic access to information and asking more remote access service.
• To satisfy the demand, companies have to get virtual face if they are not yet. • For last decades, getting accessibility via web has been a very good way to
improve a brand's public image. Nowadays, it’s even more than that, it is a requirement.
Technological factors
• Estonia and France are two of the world’s top countries in
Internet connectivity with good e-government, which is
considered as the most outstanding example in central Europe,
and in several aspects (such as governance or delivering
e-services for businesses) even exceeds the standards of the OECD
countries on average.
• Using consultants for IT solutions is a common reflex for
companies in Europe, so the market should not be hard to
penetrate.
Rivalry among
existing competitors
Threats of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Threats of Substitute Products or Services Low: There is no suppliers High:The service can
be easily copied Middle:
Buyers can try works on the softwares
without support Middle:
There is no substitute for this service except companies which offer a support on a specific
The HRM policy
In our bid to attract high level quality of human capital, we will emphasize on merit, however the following factors will be taken in to consideration, gender, balance, equality, transparency and people with disadvantage
Planning
Based on strategic forecasting of HRM needs to be done with constancy of legal requirements of each country (minimum wage and conditions)
Recruitment
Recruitment of the executive will be international however local recruitment will be done for all lower level staff and in accordance with the national laws. Gender balance also will be considered.
Selection
Specialized human resource consultancy firms will be used in the long run, given the challenges in selection management.
Training
Fresh recruitment will get on job training. Employes will also received training for professional development when needed.
Appraisal
Performance based reward mechanisms will be put in place. Therefore, annual appraisal excessive will be carried out to facilitate reward and promotion
Evaluation
There will be employed some continuous evaluation exercises that will assess the performance of staff based on meeting of targets, efficiency, as well as customer handling abilities
Motivation
The company will try to keep staff motivated by maintaining an open and flexible communication structure that promotes innovation and freedom. Salaries and benefits will be highly competitive; however we will keep salary ranges minimum in order not to discourage lower level staff by too large salary discrepancies.
Year 1
(Headquarters)France 6 employeesYear 2
(Subsidiary)Estonia 9 employeesYear 3
9 employeesYear4
9 employeesYear 5
InternationalEurope / 11 employees– Year 1 : Launching company and offering services only in France – Focus on 1 specific market and loyalty customers
– Year 2 : Launching Estonia site to gain more customers
– Year 3 to 4 : Keep the existing market and try to keep customers
– Year 5 : Launching services all around the Europe / World if success
Chief Executive Officer Dydimus Zengenene Chief Executive Officer
Dydimus Zengenene
Chief Financial Officer David Fernandes Chief Financial Officer
David Fernandes Research and Development Research and Development Technician Muharrem Yilmaz Technician
Muharrem Yilmaz Technician Jonny Ndi Technician
Jonny Ndi
Sales & Marketing Sales & Marketing
Sales Manager Jakaria Rahman Sales Manager Jakaria Rahman Customer Service Jérémie Crochemar Customer Service Jérémie Crochemar Trainer: Jérémie Crochemar Secretary: David Fernandes Additionnal functions: Technician Support: Muharrem Yilmaz Jonny Ndi 40
2
ndyear
• 1 Secretary
• 1 Technician Support
• 1 Customer Service
5th year
• 1 Trainer
• 1 Technician
Everyone got a specific function
Need more employees to answer to the need for the 2nd and 5th year CEO : Only earn enough money to survive the 1st year
Wages increase after 3 years
Dividends delivers if the result is good
Funding: 300,000 € 0 200 000 400 000 600 000 800 000 1000 000 1200 000
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Revenue
Year 1 Year 2 Year 3 Year 4 Year 5 Service A Price Quantity
Number of Customers 19 31 35 33 42
Fee per Customer 1 000,00 € 2 2 000 € 2 000 € 2 000 € 2 000 € 2 000 €
Total 38 000 € 62 000 € 70 000 € 66 000 € 84 000 €
Service B
Number of Customers 22 35 39 37 47
Fee per Customer 1 500,00 € 3 4 500 € 4 500 € 4 500 € 4 500 € 4 500 € Total 99 000 € 157 500 € 175 500 € 166 500 € 211 500 € Service C
Number of Customers 23 34 39 35 47
Fee per Customer 1 500,00 € 3 4 500 € 4 500 € 4 500 € 4 500 € 4 500 € Total 103 500 € 153 000 € 175 500 € 157 500 € 211 500 € Service D
Number of Customers 16 33 37 35 46
Fee per Customer 1 000,00 € 12 12 000 € 12 000 € 12 000 € 12 000 € 12 000 € Total 192 000 € 396 000 € 444 000 € 420 000 € 552 000 €
Net Revenue 432 500 € 768 500 € 865 000 € 810 000 € 1 059 000 €
44/9 Year 1 Year 2 Year 3 Year 4 Year 5 Sales & Marketing
Sales Manager 40 000 € 40 000 € 40 000 € 42 000 € 42 000 € Marketing Manager Customer service 36 000 € 36 000 € 36 000 € 38 000 € 38 000 € Tech support 34 000 € 34 000 € 35 000 € 35 000 € Trainer 36 000 € 36 000 € 38 000 € 76 000 € Total Salary 76 000 € 146 000 € 146 000 € 153 000 € 191 000 € Benefits Percent (%) 40% 40% 40% 40% 40%
Total benefit costs 30 400 € 58 400 € 58 400 € 61 200 € 76 400 € Total S & M Compensation 106 400 204 400 204 400 214 200 267 400
% of Revenue 24,6% 26,6% 23,6% 26,4% 25,3%
Research and Development
Technicians 70 000 € 70 000 € 70 000 € 74 000 € 111 000 € Total Salary 70 000 € 70 000 € 70 000 € 74 000 € 111 000 € Benefits
Percent (%) 40% 40% 40% 40% 40%
Total benefit costs 28 000 € 28 000 € 28 000 € 29 600 € 44 400 € Total R & D Compensation 98 000 98 000 98 000 103 600 155 400
% of Revenue 22,7% 12,8% 11,3% 12,8% 14,7%
General & Administration
Chief Executive Officer 12 000 € 45 000 € 50 000 € 50 000 € 55 000 € Chief Financial Officer 40 000 € 40 000 € 40 000 € 42 000 € 42 000 € Secretarial 36 000 € 36 000 € 38 000 € 38 000 € Total Salary 52 000 € 121 000 € 126 000 € 130 000 € 135 000 € Benefits
Percent (%) 40% 40% 40% 40% 40%
Total benefit costs 0 € 48 400 € 50 400 € 52 000 € 54 000 € Total G & A Compensation 52 000 € 169 400 € 176 400 € 182 000 € 189 000 €
% of Revenue 12,0% 22,0% 20,4% 22,5% 17,8%
Total Salary & Wages 198 000 € 337 000 € 342 000 € 357 000 € 437 000 € Total Benefits 58 400 € 134 800 € 136 800 € 142 800 € 174 800 € Total Compensation 256 400 € 471 800 € 478 800 € 499 800 € 611 800 €
Year 1 Year 2 Year 3 Year 4 Year 5 Sales & Marketing
Salaries and Benefits 106 400 € 204 400 € 204 400 € 214 200 € 267 400 € Commissions % of Revenue 5% 21 625 € 38 425 € 43 250 € 40 500 € 52 950 € Direct Mail Campaign 50 000 € 15 000 € 15 000 € 15 000 € 40 000 € ISO Certification (9000-27000) 24 000 € 24 000 €
Rent 60 000 € 102 000 € 102 000 € 102 000 € 102 000 €
Transport 4 800 € 9 000 € 9 000 € 8 640 € 9 600 €
All other expenses % of Revenue 6% 25 950 € 46 110 € 51 900 € 48 600 € 63 540 € Total Sales and Marketing 292 775 € 414 935 € 425 550 € 452 940 € 535 490 €
Research & Development
Salaries and Benefits 98 000 € 98 000 € 98 000 € 103 600 € 155 400 € All other expenses % of Revenue 3% 12 975 € 23 055 € 25 950 € 24 300 € 31 770 € Total Reaserch & Development 110 975 € 121 055 € 123 950 € 127 900 € 187 170 €
General & Administration
Salaries and Benefits 52 000 € 169 400 € 176 400 € 182 000 € 189 000 € Depreciation 4 400 € 5 133 € 5 133 € 5 133 € 5 867 € All other expenses % of Revenue 2% 8 650 € 15 370 € 17 300 € 16 200 € 21 180 € Total General & Administration 65 050 € 189 903 € 198 833 € 203 333 € 216 047 €
Total Operating Expenses 468 800 € 725 893 € 748 333 € 784 173 € 938 707 €
% of Revenue 108,4% 94,5% 86,5% 96,8% 88,6%
Allocation of Operating Expenses between:
Vaiable 69 200 € 122 960 € 138 400 € 129 600 € 169 440 € Fixed 310 800 € 491 933 € 498 933 € 519 933 € 657 667 € Total 380 000 € 614 893 € 637 333 € 649 533 € 827 107 €
46
Year 1 Year 2 Year 3 Year 4 Year 5
Net Revenues 432 500 768 500 865 000 810 000 1 059 000
Income Tax (Rate Federal & State) 0,33 0,33 0,33 0,33 0,33
Net Earnings Before Taxes -55 507 10 767 80 917 -7 773 76 540 Cumulative -55 507 -44 741 36 176 28 403 104 943
Taxes 0 0 -12 057 2 591 -25 511
47
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Purchased
Net Revenues Assets 432 500 768 500 865 000 810 000 1 059 000
Capital Expenditures
Computers, Software & Office
Equipment 13 200 2 200 13 200 4 400
Plant & Equipment 6 000 1 000 1 000
Other 500 500 500 500 500
Total Capital Expenditures 0 19 700 3 700 500 13 700 5 900
% of Revenue 4,6% 0,5% 0,1% 1,7% 0,6%
Depreciation Computers, Sofware & Office Equipment (allocated to General & Administrative Expenses)
Depreciation Rate: Years 1 3 3 3 3 3
Year 0 0 0 0 0 0 Year 1 4 400 4 400 4 400 0 0 Year 2 733 733 733 0 Year 3 0 0 0 Year 4 4 400 4 400 Year 5 1 467 Total Depreciation 4 400 5 133 5 133 5 133 5 867
48
Year 1 Year 2 Year 3 Year 4 Year 5 Accounts Receivable
% of Revenue 8,3% 8,3% 8,3% 8,3% 8,3%
Days Outstanding 30 30 30 30 30
Accounts Receivable 64 616 91 851 100 513 94 122 123 056 (Increase)/Decrease from Prev. Period -64 616 -27 236 -8 662 6 391 -28 934 Inventory
% of Revenue 8,3% 8,3% 6,7% 6,7% 6,7%
Inventory Turns 12 12 15 15 15
Inventory Days 30 30 24 24 24
Inventory 64 616 91 851 81 137 75 978 99 334 (Increase)/Decrease from Prev. Period -64 616 -27 236 10 714 5 159 -23 356 Other Current Assets
% of Revenue 1,0% 1,0% 1,0% 1,0% 1,0%
Days 4 4 4 4 4
Other CA Value 7 785 11 066 12 110 11 340 14 826 (Increase)/Decrease from Prev. Period -7 785 -3 281 -1 044 770 -3 486 Accounts Payable & Accrued Expenses
% of Revenue 8,3% 8,3% 8,7% 8,7% 8,7%
Days 30 30 31 31 31
AP & Accrued Value 64 616 91 851 105 357 98 658 128 986 Increase/(Decrease) from Prev. Period 64 616 27 236 13 506 -6 699 30 328 Other Current Liabilites
% of Revenue 1,0% 1,0% 1,0% 1,0% 1,0%
Days 4 4 4 4 4
Other Current Liabilities 7 785 11 066 12 110 11 340 14 826 Increase/(Decrease) from Prev. Period 7 785 3 281 1 044 -770 3 486
49
Begin Year 1 Year 2 Year 3 Year 4 Year 5 ASSETS
CURRENT ASSETS
Cash 300 000 165 484 151 549 231 749 214 051 234 478 Accounts Receivable 64 616 91 851 100 513 94 122 123 056 Inventories 64 616 91 851 81 137 75 978 99 334 Other Current Assets 7 785 11 066 12 110 11 340 14 826 Total Current Assets 300 000 302 500 346 317 425 509 395 491 471 694 PROPERTY & EQUIPMENT 0 14 393 11 860 6 076 13 443 12 083 TOTAL ASSETS 300 000 316 893 358 177 431 586 408 934 483 778
LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES
Short Term Debt 0 0 0 0 0 0
Accounts Payable & Accrued Expen 64 616 91 851 105 357 98 658 128 986 Other Current Liab 7 785 11 066 12 110 11 340 14 826 Current portion of long term debt 0 0 0 0 0 0 Total Current Liabilities 0 72 401 102 918 117 467 109 998 143 812
LONG TERM DEBT (less current portion) 0 0 0 0 0 0
STOCKHOLDERS' EQUITY
CommonStock 300 000 300 000 300 000 300 000 300 000 300 000
Preferred Stock 0 0 0 0 0 0
Retained Earnings -55 507 -44 741 14 119 -1 064 39 966 Total Equity 300 000 244 493 255 259 314 119 298 936 339 966 TOTAL LIABILITIES & EQUITY 300 000 316 893 358 177 431 586 408 934 483 778
50
Year 1 Year 2 Year 3 Year 4 Year 5
NET REVENUES 432 500 768 500 865 000 810 000 1 059 000 COST OF REVENUE 18 207 31 840 35 750 33 600 43 753 % of Revenues 4,2% 4,1% 4,1% 4,1% 4,1% GROSS PROFIT 414 293 736 660 829 250 776 400 1 015 247 % of Revenues 95,8% 95,9% 95,9% 95,9% 95,9% OPERATING EXPENSES
Sales & Marketing 292 775 414 935 425 550 452 940 535 490 Research & Development 110 975 121 055 123 950 127 900 187 170 General and Administration 65 050 189 903 198 833 203 333 216 047 Total Operating Expenses 468 800 725 893 748 333 784 173 938 707
% of Revenues 108% 94% 87% 97% 89%
EARNINGS FROM OPERATIONS -54 507 10 767 80 917 -7 773 76 540 EXTRAORDINARY INCOME / (EXPENSE) -1 000 0 0 0 0
EARNINGS BEFORE INTEREST & TAXES -55 507 10 767 80 917 -7 773 76 540
INTEREST INCOME / (EXPENSE) 0 0 0 0 0
NET EARNINGS BEFORE TAXES -55 507 10 767 80 917 -7 773 76 540
TAXES 0 0 -12 057 2 591 -25 511
NET EARNINGS -55 507 10 767 68 859 -5 182 51 030
51
Year 1 Year 2 Year 3 Year 4 Year 5
OPERATING ACTIVITIES
Net Earnings -55 507 10 767 68 859 -5 182 51 030
Depreciation 5 307 6 233 6 283 6 333 7 260
Working Capital Changes
(Increase)/Decrease Accounts Receivable -64 616 -27 236 -8 662 6 391 -28 934
(Increase)/Decrease Inventories -64 616 -27 236 10 714 5 159 -23 356
(Increase)/Decrease Other Current Assets -7 785 -3 281 -1 044 770 -3 486
Increase/(Decrease) Accts Pay & Accrd Expenses 64 616 27 236 13 506 -6 699 30 328
Increase/(Decrease) Other Current Liab 7 785 3 281 1 044 -770 3 486
Net Cash Provided/(Used) by Operating Activities -114 816 -10 236 90 701 6 002 36 327
INVESTING ACTIVITIES
Property & Equipment -19 700 -3 700 -500 -13 700 -5 900
Other
Net Cash Used in Investing Activities -19 700 -3 700 -500 -13 700 -5 900
FINANCING ACTIVITIES
Increase/(Decrease) Short Term Debt 0 0 0 0 0
Increase/(Decrease) Curr. Portion LTD 0 0 0 0 0
Increase/(Decrease) Long Term Debt 0 0 0 0 0
Increase/(Decrease) Common Stock 0 0 0 0 0
Increase/(Decrease) Preferred Stock 0 0 0 0 0
Dividends Declared 0 0 -10 000 -10 000 -10 000
Net Cash Provided / (Used) by Financing 0 0 -10 000 -10 000 -10 000
INCREASE/(DECREASE) IN CASH -134 516 -13 936 80 201 -17 698 20 427
CASH AT BEGINNING OF YEAR 300 000 165 484 151 549 231 749 214 051
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Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 432 500 768 500 865 000 810 000 1 059 000 Cost of Revenue Variable 17 300 30 740 34 600 32 400 42 360 Fixed 907 1 100 1 150 1 200 1 393 Total 18 207 31 840 35 750 33 600 43 753 Operating Expenses Variable 69 200 122 960 138 400 129 600 169 440 Fixed 310 800 491 933 498 933 519 933 657 667 Total 380 000 614 893 637 333 649 533 827 107
Total Costs & Expenses
Variable 86 500 153 700 173 000 162 000 211 800 Fixed 311 707 493 033 500 083 521 133 659 060 Total 398 207 646 733 673 083 683 133 870 860
Variable Costs/Revenue Ratio 0,20 0,20 0,20 0,20 0,20
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